IC Insights' Opinion on AMD's New Business Model
Bill McClean, president of IC Insights (Scottsdale, Ariz.), offers his opinions on Advanced Micro Devices’ decision to spin out its fabs into a new foundry, financed by an Abu Dhabi investment fund. "There is a lot more to being in the IC foundry business than hanging out a sign and announcing you are a foundry. Just ask some of the Malaysian and Chinese foundry startups about the difficulties of gaining marketshare in this segment of the IC industry," McClean writes. "Given that Foundry Company's capital spending budget for the next five years is forecast to be less than AMD's capital spending outlays over the previous five years, it is highly unlikely Foundry Company will help AMD gain additional marketshare. In fact, AMD will be lucky to sustain flat marketshare in the MPU segment. Moreover, a significant portion of the Foundry Company's budget must be allocated to the new foundry business, and this, of course, will take away precious spending needed for MPU production!"